Some Owners believe in managing their own income producing properties. They believe that paying the three to seven percent fees to a property management company is money better left in their own pocket. The thinking goes, “why should I pay someone to do something I can do myself?” For a single investment property, this may make some sense. For example, a residential home being rented out will have much less management needs than a twenty unit apartment building. In the vast majority of cases however, both the Owner and the property itself, benefits greatly from professional management.
For Owners, the benefit comes in the form of a single, all important resource: time. Maintenance, record keeping and accounting, tenant relations, leasing… the list of responsibilities goes on and on. Many of these tasks are simple and straightforward. Sometimes, the problems can be unexpected and complicated. Regardless of the nature of the problem however, the end result is less time for the Owner. The value of this cannot be underestimated. The more time spent on the day to day operations of managing a property, the less time there is to develop investment strategies and goals that focus on growth and overall vision.
For the property itself, the benefit of professional property management is quite simple: increased property value over the long run. Having a company that is dedicated to making sure that everything runs smoothly, by way of keeping building occupied with paying tenants and making sure all necessary state and local regulations are met, ensures that maximum value is met.
Make no mistake, buying income producing property is like buying any other business. Whether the property is a 8 unit apartment building, or a 150 unit office high rise, the elements will be the same, the tenants are essentially paying customers or clients. You will need workers to repair and maintain the property. You will have to pay regulatory fees to be in compliance with local laws. The list goes on and on. The question then becomes, why would you do this all yourself? And in what business does the Owner also act as the manager? The answer is simple: it only occurs in very small businesses. To get to the next level, to maintain an environment conducive for growth, day to day operations must be handed over to capable and trustworthy hands.